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Smith v. Workers' Compensation Appeals Board2/13/2002
CERTIFIED FOR PUBLICATION
The Workers' Compensation Appeals Board (WCAB) determined that respondent Byung Hoon Yoon, doing business as Universal Painting Company (Universal), was a licensed contractor despite his failure to obtain workers' compensation insurance covering respondent Sung Mi Lee, and thus respondent Alma Piston Company, doing business as Tomadur Engine Company (Tomadur), which had hired Yoon, was not liable for workers' compensation benefits paid to Lee. Stephen J. Smith, Director of the Department of Industrial Relations, acting in his capacity as administrator of the Uninsured Employers Fund (UEF), filed a petition for writ of review of the WCAB's decision. We deny the petition.
RELEVANT FACTUAL ANDPROCEDURAL BACKGROUND
In May 1994, Yoon applied to the Contractors State License Board (CSLB) for a painting contractor's license. Yoon's application indicated that he would do business as an individual and that he was the sole owner. In support of his application, Yoon submitted a declaration that he had no employees, and was thus exempt from the requirement under Business and Professions Code section 7125 to secure a certificate of workers' compensation insurance. On May 13, 1995, Yoon was issued a license valid until May 31, 1997.
On September 13, 1996, Yoon doing business as Universal submitted a proposal for painting work to Tomadur. Yoon proposed to paint a building for $46,750. The proposal stated that " rior to job commencement the owner will be provided with a certificate of insurance showing company coverage limits for both General Liability ($1 million) and Worker's Compensation Insurance."
On October 9, 1996, Tomadur entered into an agreement with Yoon doing business as Universal "in accordance with the terms set forth in [Yoon's] bid." The agreement stated: "Our workers are fully covered by Worker Compensation Insurance, and Universal Painting carries a One Million Dollar liability insurance policy."
Yoon employed Lee, and on November 4, 1996, Lee was seriously injured while painting Tomadur's building. Yoon did not respond to Lee's claim for workers' compensation benefits, and Lee applied to the WCAB for an adjudication of his claim. Tomadur was joined in the action, and the UEF stipulated to advance benefits to Lee.
On March 8, 2001, the workers' compensation judge (WCJ) found that Yoon lacked a valid contractor's license when Lee sustained his injuries, that Yoon and Tomadur were Lee's joint employers on that date, and that they were jointly and severally liable for his injuries.
On March 12, 2001, Tomadur filed a petition for reconsideration. In the WCJ's report and recommendation on reconsideration, the WCJ explained that Yoon lacked workers' compensation insurance when he employed Lee, and that under the WCJ's understanding of sections 7125 and 7125.2, Yoon's license was suspended immediately upon his employment of workers. The WCJ concluded that Yoon lacked the valid license required for the status of independent contractor when Lee was injured, and thus Tomadur shared liability for Lee's injuries.
On May 8, 2001, the WCAB granted reconsideration and amended the WCJ's findings, concluding that Yoon had a valid license when Lee was injured, and that Yoon doing business as Universal was Lee's sole employer on that date. The WCAB reasoned that under subdivision (a) of section 7125.2, a contractor's license is suspended 30 days after the CSLB sends the contractor a notice concerning the lack of workers' compensation insurance, and that no such notice was sent to Yoon.
On June 21, 2001, petitioner filed a petition for writ of review on behalf of th
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